As been discussed in assignment 2, we decided in our final project to research the business model and the winning strategy for a startup in the mHealth business. We identified 3 main areas for mHealth to be investigated: Wearable, Mobile App and BigData.

In the first assignment, I discussed the business model for a typical mHealth mobile app. The most important part of a successful mobile app in general and specifically in mHeatlh app is customer engagement. In this assignment, I will research and discuss the features and the model that increase customer engagement and build a winning echo-system for the whole platform.

As mHealth is moving rapidly and changes in that domain is aggressive, we decided to use the lean startup and discovery approach. That means minimum market research will be used and a more experimental and idea testing approach will be used instead. This discovery/incremental approach will give the statup the agility needed to steer its strategy as needed and faster time to market as well.

The key aspects of the business model that will be discussed are Value Propositions and Customer Segments.

The problem I am trying to solve is that despite higher mobile penetration rates across the worlds, the use of mobile technologies in healthcare is still behind expected rates and consumer expectations. mHealth stands at a significant inflection point with a big potential to play a significant role in the healthcare. From consumer point of view, mHealth is more convenient and can lead to reduce physician visits and hence cost.

From assignment 2, there are current and promising potential for mHealth mobile app among both chronically ill then fitness and wellness conscious people. These 2 customer segments contribute to almost 60% of the total mHealth mobile users (research2guidance, 2014). The main challenge was how the business model and/or strategy will increase consumer adoption and engagement. The key success factor for a mHealth startup was building the eco-system that drive users to be engaged and locked-in.

Before discussing the strategies, let us first plot the current stakeholder for such mHealth application on a stakeholder map according to their interest and influence. The stakeholders are: Chronically ill patients, Fitness & Wellness Conscious People, Physicians, Hospitals, pharmaceutical Companies and Government entities. The key outcome from this map analysis is: chronically ill patients are the key player however the mHealth solution should meet the needs and specifications of both physicians and government regulations entities. The pharmaceutical companies on the other hand will be interested on both data and advertisements and should be considered.

For a startup in mHealth markets a typical fixed strategy and planning will not be suitable nor realistic. mHealth market is highly uncertain, complex and fast-moving. A discovery driven approach (Rita McGrath) will be adopted as a suitable approach for such a turbulent and varying environments. Unlike conventional strategies that emphasize analysis, strategies that aim to discover and exploit new models must engage in substantial experimentation and learning i.e. a ‘discovery driven,’ rather than analytical approach. These strategies are about insight, rapid experimentation and evolutionary learning as much as the traditional skills of planning and execution.

A discovery driven approach can be adopted to generate a virtuous cycles. Virtuous cycles (Ramon Casadesus-Masanell & Joan E. Ricart, HBR 2011) will be a very effective way for the mHealth startup for both discover and experiment the business model and its strategy. This is also aligned the lean startup method of developing products by Eric Ries (2011)

As the main target is to build a sufficient customer base to sustain revenue and increase bargaining power over other stakeholders, mHealth services should be offered as freemium services to drive and attract customer base that is in turn increase the startup bargaining power and revenue as well. The right diagram illustrate how the virtuous cycles can help the startup. This kind of business model requires experimentation which requires initial investment to start this cycle.

This is a typical virtuous cycle that is been used by most of others in the market. The challenge for the startup then is to quickly create and capture more value than others in the market do. For such a situation it’s tough to know which business model will do well unless combining a discovery driven strategy during this virtuous cycle.

There are some key drivers to kick-start this virtuous cycle. One of these drivers is what free mHealth features to be offered that will successfully address consumer pains. For this, Osterwalder Pain/Gain model will be used to design the value proposition. I would use also the Hook Canvas by Nir Eyal as a complimentary model to the Osterwalder Pain/Gain to tackle the point from different angles.

The chronically ill patients segment will be sliced even more. As long as we are focusing on patients segment with chronic diseases, a separate job/app/features for the top 4 chronic diseases will be created. According to Centers for Medicare & Medicaid Services (www.CMS.gov), conditions such as high blood pressure, high cholesterol, arthritis and diabetes were highly prevalent. The most common chronic conditions among Medicare beneficiaries were:

High blood pressure (58%)

High cholesterol (45%)

Arthritis (29%)

Diabetes (28%)

The following chart from Statista mHealth Dossier. It shows the top drivers for mHealth adoption among patients. These drivers will help in building both product-market fit and HooK canvas.

mHealth value proposition in general is towards better healthcare using convenient channel and innovative solutions. For the purpose of this assignment, high blood pressure segment will be used. There should not be key differences on the overall strategy for other chronic conditions.

Giving the above customer segment pain, gain and jobs, the value proposition of the blood pressure mHealth platform will be to relieve these pains, create gain and deliver the customer job in a convenient way.

The above figure illustrates the hook canvas model by Nir Eyal. The purpose of this model is to increase customer engagement through 4 major steps: Trigger, Action, Reward and Investment. The key concept of the hook canvas is to attach users through the most powerful force that is “Habit”. Patients with chronic conditions/diseases are already formed a daily habit of taking measurements, log it, taking prescriptions and follow up with their physician. This customer segment are the most ready segment to form a habit by using a convenient mHealth mobile app. The question will be, what will be the strategy for each step to form a habit of using the mHealth mobile app and increase customer retention. Forming customer habit improve business outcomes through:

Understanding the HBP customer can help drive and forming the desired habit of using the mHealth platform. There are 2 types of triggers: External and Internal.

External triggers as the name imply is any event like notifications, reminder, button… Whereas internal triggers are initiated within the user as a factor of their perception or emotional status. Negative emotions is considered a very powerful trigger compared to positive emotions.

Nir explains that effective triggers are well-timed, actionable and stimulate curiosity. In the HBP mHealth platform, the external triggers can be emails and notifications. Additionally, the more closely the external triggers to the internal ones the more it become effective. These type of external triggers include reminders for taking the measures at specific/ideal times. These external triggers are well-timed, actionable and can stimulate curiosity by asking specific questions to the patients regarding their mode, diet, weight… Family members and friends can be external triggers as they are care about the health of the HBP patient.

Internal triggers are powerful than the external ones. Internal triggers can be stimulated by time and the basis of forming a habit. Negative emotions triggers should be emphasized here. Negative emotions like fear of heart attack, lose job, away from family should be linked to the platform.

Triggers should motivate people to take actions through the platform, actions then should be as simple as possible to adopt more customer. Technology and/or product must significantly reduce the steps to complete the measuring task to increase adoption rates. This can be achieved by a very simple, intuitive and convenient user interface to enter the measurements. A research in this area is essential. A very interesting place is http://coglode.com/ . This where a one can start leverage cognitive shortcuts to initiate simplistic actions.

“Variable rewards seem to keep the brain occupied and providing an opportunity to plant the seeds of new habits,” says Nir Eyal. Rewards can be categorized into three type – tribe rewards, hunt and self.

Tribe rewards can be best achieved through comparing the measurements with others in the same conditions (Age, Sex, Weight...) and give the users a sense of self progress and achievements compared to others.

Hunt rewards can be achieved by providing promotions in prescriptions, doctor consultations and discount for appointments.

Self-rewards can be achieved by providing goals and advises to achieve these goals. The goals can be lowering blood pressure through diet, exercise, anger management… This will give the users a sense of achievement and progress towards their personal goals.

Nir describes investment as future rewards that makes the next action more likely. Users can invest in time, money, effort, content, personal data, social capital or even emotional commitment.

Investment is the thing that guarantee customers lock-in and retention. Additionally, investment features in the mHealth platform will protect the copycat from rivals and give a competitive advantage that cannot be replicated.

Cloud data is one of the features that will give the users a sense of investments. Historical readings and user actions will be saved on the cloud and the more the users use the platform the more investment in terms of personal data.

Social features like communities, comments, likes… are also can be seen as an investment from the users’ point of view. Users can not switch to other applications and ignore their relationships and their history that has been built already.

Crossing the Chasm

In 1991 Geoffrey A. Moore argued that there is an existing gap between early adopters of any new technology and the mass market. He explained that new concepts and technology get pulled initially by early adaptors then fail to get the attention of the mass market. This kind of situation is highly applicable for the mHealth platform desired. There should be a strategy or at least initial thought about how we can take such a startup and technology and cross the chasm to the mass market where the real money is.

The strategy will be mainly:

Focus on early adaptors and to select a specific customer segment (High Blood Pressure Patients) rather than all chronically ill patients. These early adaptors should be delighted as possible to the word of mouth will help crossing the chasm

Marketing hype play an important Role here. How marketing will going to position the platform is very crucial. The positioning should be unique and focus on social and emotional aspects as well

Reward and delight features will attract conservative people in the mass market

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